Two affordable housing developments in New York City have secured more than $180.6 million in financing from Merchants Capital.

Both transactions executed a novel risk-share structure with Merchants Capital, Freddie Mac, and New York City Housing Development Corp. (HDC) as the local housing finance agency. These risk-share loans are structured as permanent forward commitments to take out the new construction loans.
"The creativity of these two transactions is unparalleled. We are incredibly thankful to our partners at Freddie Mac and HDC for their inventiveness, as well as to our clients for their commitment to ensuring the development of truly transformative projects," said Mathew Wambua, executive vice president at Merchants Capital.
Located in East Harlem, MEC 125th Street is a 19-story, 404-unit mixed-use, mixed-income complex that will bring needed affordable and market-rate units to this revitalized neighborhood.
The development was financed through a $120 million, 35-year Freddie Mac forward commitment loan secured by Merchants Capital on behalf of The Richman Group Development Corp.
Partners in the deal include New York City Housing Preservation and Development (HPD), New York City Economic Development Corp. (NYC EDC), Freddie Mac, Citi Community Capital, Blank Rome, and Sidley Austin.
"We are excited to be partners in what will be a remarkable addition to thriving East Harlem and to be part of the community," said Kristin Miller, president of The Richman Group Development Corp. "This is the culmination of the efforts of many talented people and organizations, as well as over 10 years of hard work and perseverance. It will be amazing to see this project come to fruition."
Half of the project's apartments will be offered at rents ranging from 37% of the area median income (AMI) to 80% of the AMI. An additional 23% of the units will have rents ranging from 130% of the AMI to 145% of the AMI, and the remaining 27% will be market rate. The development site is conveniently located one block from the 125th Street Subway and two blocks from Harlem 125th Metro North Station, providing easy access throughout the city and the greater New York Area.
The second development, Caton Flats, is located in the much-anticipated revitalization of the Flatbush Caton Market, a destination of Caribbean commerce, entertainment, and culture in New York City. The approximately 280,000-square-foot, 255-unit project is being developed by BRP Development, Urbane Development, and the Caribbean American Chamber of Commerce and Industry in coordination with HDC, HPD, NYC EDC, Freddie Mac, Citi Community Capital, Blank Rome, and Sidley Austin.
Loan proceeds will fund the development of mixed-income housing, ground-floor retail, space for community groups, a business incubator, and a new home for the Flatbush Caton Market.
Merchants Capital secured the loan through the new Freddie Mac non-LIHTC (low-income housing tax credit) forward commitment on behalf of BRP Development Corp. Non-LIHTC forwards are unfunded, forward commitments for affordable housing developed by nonprofits and subsidized, rent-restricted affordable housing that for-profit developers can use for their new multifamily construction or substantial rehabilitation projects.
"The financing secures the future of Caton Flats as an incredible source of affordable housing and economic opportunity for community residents and entrepreneurs," said Andy Cohen, director of development for BRP. "In addition to providing the neighborhood with much-needed housing, Caton Flats will also serve as a center of commerce, entrepreneurship and culture for Flatbush and the surrounding community."
Ten percent of the Caton Flats apartments will be priced affordably at 37% of the AMI. Fifteen percent of the units will be set at 57% of the AMI, and another 25% set at 90% of the AMI. The other half of the Caton Flats apartments will have rents capped at 130% of the AMI.